Airbus urges compromises on Brexit, transatlantic tariffs

Airbus's annual press conference on Full-Year 2019 results in Blagnac

By Allison Lampert and Tim Hepher

MONTREAL/PARIS (Reuters) -The head of European planemaker Airbus called for an end to separate diplomatic squabbles over Britain’s exit from the European Union and a transatlantic aircraft subsidy dispute that collectively overshadow its business.

Chief Executive Guillaume Faury said Airbus – whose manufacturing plants straddle Britain and the EU – was preparing itself for disruption if Britain completes its exit from the bloc without a deal, but downplayed warnings of severe upheaval.

“It would really be a pity that after so many years of preparation there is no deal at the end. I think it would be much better for the EU and the UK to have an orderly Brexit,” Faury told a conference.

“This being said, if there is no deal we will have to live with it. There will be a more difficult transition on Dec. 31 and we are preparing ourselves for some logistical issues, but we don’t think this is going to be unmanageable,” he added.

His comments came after Britain’s manufacturing industry warned of a potential “knockout blow” if Prime Minister Boris Johnson is unable to secure a trade deal with the EU before temporary arrangements end on Dec. 31.

Faury also called for compromise in a dispute over aircraft subsidies in which both the EU and United States have imposed tariffs on multiple goods.

“We are calling for a de-escalation … and finding a long-term agreement between the U.S. and the EU, and we think this is what will happen,” Faury told the Conference of Montreal.

“And it will happen under the Biden administration, but I think it would have happened anyway,” he added.

Diplomats say the EU and outgoing Trump administration are in “serious” negotiations to end the 16-year-old trade fight, which has come to a head just as Britain leaves the EU.

Airbus found itself squeezed between the two sets of trade negotiations last week when Britain halted tariffs on U.S. goods adopted in support of Airbus as it prepares to exit the EU.

Industry sources said the decision, contradicting earlier signals that tariffs would stay, ended unity among Airbus backers Britain, France, Germany and Spain and precipitated the worst cross-Channel rift over aerospace in decades.

Speaking by video link at a conference forced to take place virtually this year because of coronavirus restrictions, Faury said it was vital to restore flights as vaccines are rolled out.

But he said he was not worried that premium travel would be severely impacted forever by the new technology, saying most business would still need to be conducted in person.

(Reporting by Allison Lampert in Montreal and Tim Hepher in ParisEditing by Matthew Lewis)